Carell and Rawding (Child support)

[2021] AATA 1985

Carell and Rawding (Child support) [2021] AATA 1985 (12 May 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/SC020896

APPLICANT:  Ms Carell

OTHER PARTIES:  Child Support Registrar

Mr Rawding

TRIBUNAL:Member M Baulch

DECISION DATE:  12 May 2021

DECISION:

The tribunal set aside the decision under review and, in substitution, decided that the amounts of $40 paid on 10 April 2020, $40 paid on 17 April 2020 and $40 paid on 24 April 2020 by Ms Carell to [School 1] should be credited against Ms Carell’s liability to pay child support to Mr Rawding pursuant to section 71C of the Child Support (Registration and Collection) Act 1988.

CATCHWORDS

CHILD SUPPORT – non-agency payment – prescribed payment for school fees – whether enforceable maintenance liability existed when payment made – decision to credit fees paid after assessment registered for collection – decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. This application for review is about whether or not any of the 13 weekly payments of $40 (a total of $520), paid by Ms Carell to [School 1], should be credited against Ms Carell’s liability to pay child support to Mr Rawding.

2. Ms Carell and Mr Rawding are the separated parents of two children.  From 3 February 2020 Ms Carell has been assessed as liable by Services Australia – Child Support (Child Support) to pay child support to Mr Rawding, with Child Support collecting the liability from Ms Carell on Mr Rawding’s behalf since 9 April 2020.

3. On 20 May 2020, Ms Carell requested that Child Support credit 13 weekly payments of $40 she made to [School 1] from 7 February 2020 against her child support liability (commonly referred to by Child Support as a “non-agency payment”).  On 20 May 2020, Child Support considered the matter and decided to not credit any of those amounts.

4. Ms Carell objected to that decision and, on 15 August 2020, that objection was partly allowed.  It was instead decided that half of one payment of $40 (i.e., $20) could be credited against Ms Carell’s liability to pay child support to Mr Rawding, but the remainder could not be credited (the decision under review).  Ms Carell has now applied to this tribunal seeking an independent review of Child Support’s decision.

5. The parties have agreed that this application should be determined without a hearing and the tribunal is satisfied, in accordance with section 34J of the Administrative Appeals Tribunal Act 1975 (the AAT Act), that the issues for determination on review can be adequately determined in the absence of the parties. The tribunal therefore proceeded to review the decision by considering the evidence and submissions before it without holding a hearing.

6. The tribunal had before it relevant documents provided to it by Child Support pursuant to section 37 of the AAT Act (90 pages), copies of which were sent to both parties by Child Support prior to the tribunal hearing. The tribunal also had regard to written submissions provided by Ms Carell (labelled folios A1 to A20).

ISSUES

1. The legislative provisions relevant to this review application are contained within the Child Support (Registration and Collection) Act 1988 (the Act).

2. The issue to be determined by me in this review application is whether or not any of the 13 weekly payments of $40 made by Ms Carell to [School 1] should be credited towards Ms Carell’s enforceable maintenance liability.

CONSIDERATION

1. Where a parent has applied to Child Support for an assessment of child support, they may also apply to have that liability entered into the Child Support Register and be collected on their behalf from the liable parent by Child Support.  Once the application is accepted the liability is then “enforceable” by Child Support against the liable parent and, pursuant to section 30 of the Act, the liability becomes a debt due to the Commonwealth owed by the liable parent.

2. Under section 71A of the Act, either parent may apply to the Registrar for a payment made by the payer of an enforceable maintenance liability, that partially or completely satisfies an amount owed by the payer, the payee or both, as having been made to the Registrar.  Section 71A of the Act further states that the payment must have been intended by both the payee and the payer to be paid in partial or complete satisfaction of an amount payable under the liability in relation to the child support enforcement period.

3. In essence, the requirements that must be met before the Registrar can credit such a payment under section 71A of the Act are:

   ·      The payment must have been actually made;

   ·      The payment must have been made during a period when the maintenance liability was enforceable by Child Support; and

   ·      Both the payee and the payer must have intended that the payment was paid in complete or partial satisfaction of an amount payable under a liability in relation to the child support enforcement period.

   Section 71D of the Act gives the Registrar, and therefore me, the discretion to refuse to credit payments under section 71A of the Act if satisfied that, in the circumstances of the particular case, the amount ought not to be credited even if the payment meets all the requirements discussed above.

4. Ms Carell is seeking to have 13 weekly payments of $40 each made by her to [School 1] credited against her enforceable maintenance liability.  She identified the payments as commencing on 7 February 2020, and I calculated that the payments were made on:

7 February 2020	14 February 2020	21 February 2020	28 February 2020
6 March 2020	13 March 2020	20 March 2020	27 March 2020
3 April 2020	10 April 2020	17 April 2020	24 April 2020
1 May 2020

1. Ms Carell has supplied a fee statement and other correspondence regarding the payments.  I noted that the last payment receipted on that fee statement is dated 28 April 2020 and I was unable to identify any evidence to support the contention that a payment of $40 was made on 1 May 2020.  However, I was satisfied that Ms Carell has actually made each of the remaining 12 payments of $40 from 7 February 2020 to 24 April 2020.

2. I noted that since 9 April 2020, Child Support has been collecting the child support liability on Mr Rawding’s behalf (see folio 72).  I was satisfied that the $40 payments made on 10 April 2020, 17 April 2020 and 24 April 2020, were all made at a time when the maintenance liability was being enforced by Child Support. 

3. Ms Carell, in her submissions, submits that the liability has been enforceable since 3 February 2020, as Child Support has sought to collect outstanding child support arrears for the period 3 February 2020 to 8 April 2020.

4. If a child support liability is not being collected (or “enforced”) by Child Support, the payee may apply to Child Support to have the liability enforced by Child Support (section 28A of the Act).  Mr Rawding did this on 9 April 2020.  The payee may also apply to Child Support for any unpaid amounts payable under the liability, in relation to a specified period, to be treated as an arrears amount.  The specified period ends on the day before the liability becomes enforceable (subsection 28A(3) of the Act).  Mr Rawding made such an application in respect of unpaid amounts for the period 3 February 2020 to 8 April 2020 (see folio 72). 

5. In Strauss and Strauss [1998] FamCA 2, the Full Court of the Family Court considered whether a payment made before the liability was registered under the Act could be credited under section 71, 71A or 71C of the Act against the liability. The Court held:

   It is clear that [sections 71, 71A and 71C] relate only to payments which have been made either to the other party or to a third party in respect of a maintenance liability which is at that time registered under the Registration Act. [my emphasis]

   Accordingly, a payment made during a “specified period” for the purposes of section 28A of the Act (that is, during an “opt-in arrears” period) cannot be credited under sections 71, 71A or 71C, as there is no enforceable maintenance liability at the time such a payment was made. 

6. In this case, the liability became enforceable from 9 April 2020 and I was satisfied that the liability was not enforceable for the “specified period” 3 February 2020 to 8 April 2020, even though Child Support now seeks to collect child support for that period.  I therefore found that none of the payments made by Ms Carell to [School 1] before 9 April 2020 were made during the period when the liability was enforceable by Child Support. 

7. For the three payments made on 10 April 2020, 17 April 2020 and 24 April 2020 to be credited, pursuant to section 71A of the Act, both Ms Carell and Mr Rawding must have intended that the amounts were paid in lieu of Ms Carell’s obligation to pay child support to Mr Rawding. 

8. In her submissions, Ms Carell refers to Mr Rawding’s involvement in a decision to send the child to [School 1].  However, Mr Rawding’s intention regarding the child’s attendance at [School 1] is not the issue here.  If the three payments of $40 made by Ms Carell to [School 1] on or after 9 April 2020 are to be credited under section 71A of the Act, both Ms Carell and Mr Rawding must have intended that the payment of those fees were made in lieu of Ms Carell’s obligation to pay child support to Mr Rawding. 

9. I noted that when she made her application to have the payments credited on 20 May 2020, Ms Carell answered “no” to the question “Do both parties agree the payment made was intended as child support?” (at folio 19).  Accordingly, I identified no evidence that Mr Rawding agreed to Ms Carell making payments to [School 1] instead of, or in lieu of, making payments towards her liability to pay him child support. 

10. Therefore, in the absence of this intent, it is not possible to credit the three payments of $40 made by Ms Carell on 10 April 2020, 17 April 2020 and 24 April 2020 against Ms Carell’s liability to pay child support pursuant to section 71A of the Act.

11. Section 71C of the Act provides for payments of the kind prescribed by regulation to be credited against the amount payable under the enforceable liability for a payment period, up to a maximum of 30% of the amount payable. If section 71C of the Act applies, there is no requirement to establish mutual intent that a payment be made in lieu of child support. As with section 71A of the Act, the payments must be made during a period when the maintenance liability was enforceable by Child Support.

12. I considered whether or not section 71C of the Act could apply to the three payments of $40 made by Ms Carell on 10 April 2020, 17 April 2020 and 24 April 2020.

13. For section 71C of the Act to apply, the payment must be a payment of the kind specified in regulation 19 of the Child Support (Registration and Collection) Regulations 2018 (paragraph 71C(1)(b) of the Act).  Regulation 19 states that specified payments are payments of the following kinds:

    ·      Child care costs for the child who is the subject of the enforceable maintenance liability;

    ·      Fees charged by a school or preschool for that child;

    ·      Amounts payable for uniforms and books required by a school or preschool for that child;

    ·      Fees for essential medical and dental services for that child;

    ·      The payee’s share of amounts payable for rent or a security bond for the payee’s home;

    ·      The payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;

    ·      The payee’s share of repayments on a loan that financed the payee’s home;

    ·      Costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.

14. Ms Carell made payments of $40 each on 10 April 2020, 17 April 2020 and 24 April 2020.  I was satisfied that there is no dispute that these payments were towards fees charged by [School 1], which are payments of a class prescribed by the Regulations.

15. Paragraph 71C(1)(d) of the Act provides that the payment will not be credited if the liable parent has at least regular care of the child, or any of the children, to whom the child support assessment relates.  Subsection 4(1) of the Act defines regular care to have the meaning given by subsection 5(2) of the Child Support (Assessment) Act 1989 and means care of at least 14% but less than 35%.

16. Child Support’s records show that since at least 3 February 2020, Mr Rawding has had 100% care of both children.  I was therefore satisfied that Ms Carell does not have at least regular care of a child to whom the child support assessments relates.

17. I consequently found that the three payments of $40 each made on 10 April 2020, 17 April 2020 and 24 April 2020 are payments to which section 71C of the Act applies.

18. I then considered section 71D of the Act, which provides the discretion to refuse to credit the three payments made by Ms Carell for the school fees.  I considered Child Support’s policy on when this discretion applies and had regard to the Child Support Guide at 5.3.1, which states, in part:[1]

    [1] Guides to Social Policy Law, Child Support Guide, Department of Social Services, version 4.56, can be found at align="left">Discretion to refuse to credit an amount

    The Registrar can refuse to credit a non-agency payment claimed under CSRC Act sections 71, 71A or 71C if the Registrar is satisfied that, in the circumstances of the particular case, the amount ought not to be credited (CSRC Act section 71D).

    The Registrar may refuse to credit an amount in certain circumstances, including, but not limited to, the following:

    ·The payee's agreement to credit an amount paid to a third party or payment made as a transfer of property was obtained through coercion or harassment. (However, where the Registrar is informed about this after the payment has been credited, it will be necessary for the payee to object to the Registrar 's decision to credit the amount.)

    ·The payer is claiming a credit under CSRC Act section 71C for an expense they regularly meet that was taken into account in a change of assessment decision. For example, the Registrar or a court has reduced the annual rate (or refused to increase it) because the payer usually pays school fees, medical expenses for the child, mortgage or rent payments or any other prescribed payments.

    ·The payer is claiming credit under CSRC Act section 71C for an expense which they have undertaken to pay in addition to their liability as specified in an agreement between the parents (this does not have to be a child support agreement).

    ·The payer is claiming credit under CSRC Act section 71C for an expense that they are responsible to pay under the terms of a court order.

    ·The payer is claiming credit under CSRC Act section 71C for expenses for the child for which they are separately responsible. For example, the payer claims credit for child care costs for the days when the child resides with the payer. If the payer claims credit for a payment for which they and the payee are jointly responsible, and the amount does not relate to the payee's home, the Registrar has no basis of apportioning the payment and must credit the full amount. However, if there is evidence that the parents have explicitly agreed about how much each party will pay, the Registrar will apportion responsibility according to their agreement.

    ·The payer is claiming a credit under CSRC Act section 71C for loan repayments and they have a history of regularly withdrawing funds from the loan account using its redraw facility.

19. I am not bound by policy, such as that set out in the Child Support Guide.  However, in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, the Full Federal Court held that a tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation. In this instance, I accepted that the policy is unobjectionable and, in the interests of consistency of decision-making under the Act, considered that the policy should be applied.

20. It is unclear to me why the Child Support objections officer chose only to credit half of a payment, rather than the full amount and they have not explained, in their reasons, why they have exercised the discretion provided for in section 71D of the Act in this manner. 

21. I noted that the fee statement from [School 1] is in Ms Carell’s name and there is no evidence that Mr Rawding is responsible for making payment for the school fees, nor is there any evidence of an explicit agreement between the parents relating to who is responsible for the fees.  In those circumstances, and having regard to Child Support’s policy, I declined to exercise the discretion provided for in section 71D of the Act to refuse to credit the three payments of $40 against the enforceable maintenance liability.

22. I therefore found that the payments of $40 each, made by Ms Carell to [School 1] on 10 April 2020, 17 April 2020 and 24 April 2020 should be credited against her child support liability pursuant to section 71C of the Act.

23. Therefore, and for these reasons, I decided to set aside the decision under review and substitute my own decision below.

DECISION

The tribunal set aside the decision under review and, in substitution, decided that the amounts of $40 paid on 10 April 2020, $40 paid on 17 April 2020 and $40 paid on 24 April 2020 by Ms Carell to [School 1] should be credited against Ms Carell’s liability to pay child support to Mr Rawding pursuant to section 71C of the Child Support (Registration and Collection) Act 1988.